Property depreciation schedule calculator
Project building and fixtures deductions year-by-year for an investment property.
Calculator propertyLogic updated January 2026
This calculator projects year-by-year depreciation deductions on an investment property by splitting the depreciable assets into two categories: the building structure (depreciated straight-line on its original value) and the fixtures and fittings (depreciated using the diminishing-value method on the remaining balance each year). Together they represent a non-cash deduction that reduces taxable income for property investors in many jurisdictions.
How this is calculated
Formula
Building (year): originalValue × ratePercent / 100 (capped by remaining) ; Fixtures (year): remaining × (2 / effectiveLife) (capped by remaining)Step-by-step
- Calculate the annual building deduction as the original building value multiplied by the depreciation rate. This stays constant each year (straight-line) until the remaining balance runs out
- Calculate the diminishing-value rate for fixtures as 2 ÷ effective life in years (the double-declining factor)
- For each year of the projection: apply the straight-line building deduction, capped by the remaining building value
- For each year, also apply the diminishing-value rate to the remaining fixtures balance, capped by the remaining value
- Sum the two deductions for the year — this is the total depreciation claimable that year
- Track cumulative depreciation across all years — this is the total non-cash deduction over the projection
- Rounding mode
- ROUND_HALF_UP
- Precision
- 20-digit internal precision (Decimal.js), rounded to 2 decimal places for display
- Logic last reviewed
Assumptions & limitations
What this calculator assumes
- Building depreciates straight-line on the original value at the given annual rate
- Fixtures depreciate using the diminishing-value (double-declining) method at 2 / effective life per year
- Building deduction is capped each year by the remaining un-depreciated value
- No mid-year acquisition or pro-rata adjustment is modelled — first-year deduction is a full year
- No salvage value is assumed for either category
What this calculator doesn’t account for
- Does not model jurisdiction-specific eligibility rules (some jurisdictions exclude older properties or used fixtures from depreciation)
- Does not account for renovation depreciation or partial-year acquisition adjustments
- Does not include the cost of obtaining a quantity surveyor's depreciation report
- Does not model recapture rules that may apply when the property is sold
- Treats fixtures as one bundle; real schedules itemise hundreds of assets at different effective lives
Worked example
An investor commissions a depreciation schedule for an investment property with $400,000 of building value depreciating at 2.5% straight-line, and $40,000 of fixtures with an effective life of 10 years (DV rate 20%).
| Input | Value |
|---|---|
| Building value | $400,000 |
| Building rate (straight-line) | 2.5% |
| Fixtures value | $40,000 |
| Fixtures effective life | 10 years |
| Projection | 5 years |
Year 1 deduction: ~$18,000 — Year 5 deduction: ~$13,277 — 5-year cumulative: ~$76,623
Building: $10,000 every year ($400,000 × 2.5%). Fixtures DV rate is 2/10 = 20%. Year 1 fixtures = $40,000 × 20% = $8,000. Year 2 fixtures = $32,000 × 20% = $6,400. Year 3: $5,120. Year 4: $4,096. Year 5: $3,277. Total deduction declines each year because the diminishing-value method reduces the deduction as the asset base shrinks.
Frequently asked questions
What is property depreciation?
A non-cash tax deduction representing the gradual decline in value of an asset over its useful life. For investment property, it covers the building structure and the fixtures/fittings within it. Because it's non-cash, you don't actually spend money each year — but in many jurisdictions you can deduct the depreciation amount from your taxable rental income, reducing tax payable.
Straight-line vs diminishing value?
Straight-line gives the same deduction every year (original value × rate%), while diminishing-value gives a higher deduction in early years and smaller deductions later (remaining value × rate%). DV front-loads the tax benefit, which is preferable when the time-value of money matters. Most jurisdictions apply straight-line to building structures and DV (or DV-equivalent) to fixtures.
What can be depreciated?
Typically two categories: the building structure (walls, roof, plumbing, fixed electrical) and removable fixtures and fittings (carpets, blinds, appliances, hot water systems, air conditioning). Land cannot be depreciated. Eligibility rules vary by jurisdiction — some exclude older buildings, some restrict deductions on used assets purchased with the property. Specific rules vary; consult a qualified tax adviser.
Do I need a depreciation schedule?
If you own an investment property in a jurisdiction that allows depreciation deductions, a quantity surveyor's report typically pays for itself many times over in deductions claimed. Self-prepared schedules are usually not accepted by tax authorities for the building component. The cost of the report is generally itself deductible. Consult a qualified tax adviser to confirm requirements in your jurisdiction.
Why does my deduction get smaller each year?
Because of the fixtures (diminishing-value) component. Each year's DV deduction is a percentage of the remaining (smaller) balance, so the deduction shrinks as the asset depreciates. The building (straight-line) component stays constant each year until the remaining building value runs out — typically 40 years for a 2.5% rate. Most of the deduction shrinkage happens in fixtures.
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